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Nuclear’s Questionable Future

September 21, 2012

The following is from this year’s Note 46 of The Kelly Letter, which went out to subscribers last Sunday morning.

The Japanese government announced an about-face in its energy policy on Friday, pledging to become nuclear-free by the 2030s. In the wake of last year’s tsunami and the Fukushima nuclear power plant disaster that forced the evacuation of more than 160,000 people north of Tokyo, public opinion polls showed that 70 pct of Japanese want to end nuclear energy in Japan.

This is unfortunate because it represents an emotional response rather than a well-reasoned one. The problem at Fukushima had nothing to do with shortcomings of nuclear power, but everything to do with an inept utility company, Tokyo Electric Power Co (TEPCO), choosing to locate the Fukushima nuclear power plant within a tsunami inundation zone. Just as we should not ban the production of automobiles because some were destroyed in the wave, nor should we ban the production of nuclear power plants because one was destroyed in the wave.

A lengthy report released in July by the Investigation Committee on the Accident at the Fukushima Nuclear Power Stations of Tokyo Electric Power Company (ICANPS) confirmed a different government-sponsored report’s conclusion: The disaster was a “man-made” result of collusion between the government, regulators, and TEPCO. The ICANPS chairman said at a news conference, “The root cause of the Fukushima crisis is that they selfishly assumed that natural disasters that are beyond their imagination would not occur. In short, they underestimated natural disasters.”

The report added, “The utility and regulatory bodies were overly confident that events beyond the scope of their assumptions would not occur . . . and were not aware that measures to avoid the worst situation were actually full of holes.”

Despite these findings, Japanese leaders lacked the courage to explain to the public that properly managed nuclear power is the world’s best hope for non-fossil-fuel energy production, and instead allowed national policy to be swept along on a tide of misinformed public opinion.

At a summer rally in front of Sano Station in the city where I live and work, I engaged a protester to ask why he opposed nuclear energy. “For the sake of the children,” he told me. I asked, “Don’t the children want a stable climate in their future, and won’t abandoning nuclear energy guarantee that they get one contaminated by carbon instead?” He politely said that I didn’t understand; I politely retorted that it was he who didn’t understand. I assume he’s been partying all weekend after Friday’s announcement.

One group that hasn’t been partying is Japan’s Federation of Electric Power Companies, which called the decision “very regrettable” and warned that it will send energy prices higher and, at least in the near future, increase Japan’s greenhouse gas emissions because the country will burn more fossil fuels. Japan is already the world’s largest importer of liquefied natural gas. While the country claims that it will eventually replace its nuclear energy dependence with renewable energy sources, it’s doubtful that it will be able to do so.

The Yomiuri Newspaper called the decision “extremely irresponsible” and the new plan an “immature scheme” that’s “totally unworthy of a national energy policy.”

For the benefit of the Sano protester and others who share his way of thinking, I reiterate that it’s they who don’t understand how to create a better future. Indeed, Japan’s new policy was accompanied by a downgrade in the country’s climate protection goals. Before Fukushima, Japan aimed for a 30 pct reduction in carbon dioxide emissions by 2030 from 1990 levels. Now, it’s aiming for “about 20 pct” in a low growth economy, and only “about 10 pct” in a higher growth economy.

Author and environmental activist Mark Lynas told World Nuclear News on Friday that Japan’s new policy is “nothing short of insane,” bemoaning that “politicians around the world — under pressure from populations subjected to decades of anti-nuclear fear mongering by people who call themselves greens — are raising the risks of catastrophic climate change in order to eliminate the safest power source ever invented.”

Also in the letter:

The onset of QE3 and the immediate downgrade of US credit by Egan-Jones…

QE3 will not produce more lending activity because rates are already low, but it will relieve banks of toxic mortgage-backed securities. There’s a disconnect between the plan’s stated goals and its likely effects. As we expected, asset-holders will benefit but the broader economy will not…

On schedule, the dollar weakened and commodities strengthened. In past QEs, this preceded a settling back before a long line of price appreciation ensued. In preparation, we’re shorting oil and silver in hopes of covering in the short term as they and other assets we want to own bottom ahead of the QE push…

And more! Sign up to read the rest of this letter and all back letters, and receive future letters starting this Sunday.

3 Comments

The teething problem with nuclear energy is waste disposal. I highly recommend you watch Michael Madsen’s documentary, Into Eternity, about the construction of the Onkalo waste repository at the Olkiluoto Nuclear Power Plant on the island of Olkiluoto, Finland.

Nuclear waste disposal is no longer an issue with Gen IV reactors, which are on schedule for operation in the 2030s, about the same time frame that Japan has targeted for producing zero energy with nuclear technology. Gen IV reactors not only produce a smaller amount of waste with a much shorter lifetime of radioactivity, they can actually consume the nuclear waste created by previous reactor designs.